Finance Formulas / July 19, 2018 / Aniyah Booth
A dividend is allocated as a fixed amount per share, with shareholders receiving a dividend in proportion to their shareholding. For the joint-stock company, paying dividends is not an expense; rather, it is the division of after-tax profits among shareholders. Retained earnings (profits that have not been distributed as dividends) are shown in the shareholders' equity section on the company's balance sheet - the same as its issued share capital. Public companies usually pay dividends on a fixed schedule, but may declare a dividend at any time, sometimes called a special dividend to distinguish it from the fixed schedule dividends. Cooperatives, on the other hand, allocate dividends according to members' activity, so their dividends are often considered to be a pre-tax expense.
Average total assets is defined as the average amount of assets recorded on a company's balance sheet at the end of the current year and preceding year. This figure is most commonly used in comparison to the total sales figure for the current year, to determine the amount of assets required to support a certain amount of sales. This is a useful comparison, since a low asset level in comparison to sales implies that the management team is making highly efficient use of its assets in running the business.
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